Question:

Davis & Sons has a defined benefit plan for its employees. The information below relates to its pension plan and related obligations for 2011 and 2012.

Year	2011	2012
Pension Plan Assets (beginning)	320,000	?
PBO (beginning)	360,000	?
Service Cost	25,000	35,000
Interest Cost (8%)	?	?
Expected Rate on Plan Assets (9%)	?	?
Actual Rate on Plan Assets	30,000	24,000
Contributions to Plan	35,000	35,000
Benefits Paid to Retirees	20,000	20,000

Required:

1. Prepare the journal entry to record the pension expense for 2011

2. What the amount of the Pension Plan Assets and the PBO at the beginning of 2012?

3. Prepare the journal entry to record the pension expense for 2012